Having a well thought-out marketing plan is critical for your success in the note business.
Whenever you plan a marketing effort, you want to achieve quick, maximum results. You want the phone to ring, quote and close transactions. HOWEVER, I found that real success comes with long term thinking and planning.
A great deal of your planning must be geared to all the note holders with whom you did not do business. All of those people who were not ready to sell, did not respond to your marketing piece or did not accept your offer. This is future business, and at least as important to your success as the transactions you closed.
My experience tells me that 75% of my completed transactions are with sellers who initially were not ready to do business. They are seeds you planted; you can either cultivate them or allow them to rot in the ground. Most people in our business do not do a good enough job cultivating.
Getting potential note sellers to remember you is paramount. My motto is “GIVE THEM SOMETHING THEY WILL KEEP”. When it comes time for them to sell, they must have your name and number. If they do not, someone else will get the business.
There are some very basic techniques you can use, such as, adding a PS at the end of all of your marketing pieces; Instruct the note holder to keep your letter with the rest of their note documents. Does this work all the time? No, but you will be surprised how often it does work. That’s as basic as it gets. Let’s go to the other extreme.
I do note (not real estate) appraisals. I started experimenting with this idea with great success. It became obvious that some of the note sellers I was talking to were not really interested in selling right NOW. They were only interested in determining the value of their loan.
Nobody was providing this service to note holders. Appraisals are needed by note holders as a preliminary step before actually cashing out or for estate planning, partnership valuations, inheritance situations, divorces, etc. It’s amazing how much demand there is, especially in today’s economy once you know where to look.
There are many benefits of using this strategy. Let’s briefly explore some of them.
This is a great entree into the most desirable market available to paper players today – financial professionals. In order for you to make substantial money in this business, it is essential to have attorneys, accountants, financial planners, etc. referring you business.
Note appraising is the single best way of developing the professional sources of business. As an appraiser, you are dealing professional to professional.
Note owners do not discard their appraisals. When they decide to sell, they are going to find your appraisal with the rest of the important note documents. You will be the obvious person that they or their financial professional will call. Your credibility is far above all those note buyers who sent, “I buy notes for cash” letters.
The finished appraisal provides all the essential information regarding the loan: the parties involved and the copies of the documents. In other words, all the information you need to buy or flip the note. Is this ethical? Yes, you see the appraisal document (which I authored) discloses and allows you to have an interest in the loan.
One of the best benefits of doing note appraisals is that you can get paid. That’s right- you can get paid to do appraisals. Fees range from the low hundreds for a simple residential loan… on up for larger loans. Remember the whole idea is to put something in a note owner’s hand that they keep. If they paid for it, they not only keep it but they take you seriously.
I have designed an entire marketing campaign around appraisals, including letters and brochures. I had the appraisal document I use professionally prepared. The basic document is seven pages and is nicely bound for presentation to the client. I do not expect you to go to that kind of expense and effort immediately.
You can start the way I did. You can do your appraisal in letter form and call it a Letter of Opinion. It’s a great way to start. I encourage you to start now. Note holders will remember who you are, you will develop important relationships with financial professionals and after a while you will even get paid.